HOA liens, priority, redemption, Mortgages, Deeds of Trust and more in Washington state. The interplay between the HOA statute, redemption statute, and the recording statute.

1. HOA – WASHINGTON STATE -
PRIORITY LIEN STATUS
SAFE AND SOUND LENDING (RCW 64.34, RCW 6.23, RCW 65.08)

2. HOMEOWNERS’ ASSOCIATION – PRIORITY LIEN
• General rule is that “first in time” has priority: if your lien or judgment is recorded in the
real property records of the county where the property is located BEFORE any other lien
then your lien has superiority.
• Exceptions to this rule include
• Real Estate Taxes
• Governmental Assessments or Charges on real property (sewer assessments, etc.)
• HOA assessments as set forth in the periodically issued budget of the HOA (excluding capital
improvements)
• Other rules that affect these exceptions:
• If the other lien is a mortgage or other debt including IRS tax lien
• If the HOA forecloses their lien judicially vs non-judicially
• If the HOA lien is a “special” assessment
• If the HOA CC&Rs have lien subordination or priority language

3. PROCESS FLOW #1
Determine
what liens
exist, when
they were
recorded or
filed
HOA Declaration of Covenants Conditions & Restrictions (CCRs ) recorded
Lien for HOA assessments exist as of
the recording date of the HOA’s CC&Rs,
and if CC&Rs provide that assessments
are superior lien, then HOA liens are
superior to all later recorded liens and
judgments, EXCEPT…
Mortgage or Deed of Trust recorded
Mortgage or DOT is superior to HOA
lien assessments, if Mortgage or DOT is
recorded PRIOR to HOA assessments
becoming delinquent, EXCEPT…
(RCW 64.34.364(2))
“Lien arises upon delinquency, but the
priority was established upon filing of
the CC&Rs)
HOA Assessments delinquent (lien
arises)
Up to 6 months of HOA assessments
set forth in the periodically approved
budget (not including capital
improvements) have priority over
Mortgages or DOTs.
Superior-priority lien for 6 months of
assessments due PRIOR to:
(i) the mortgagee or HOA Sheriff’s Sale
under judicial foreclosure or
(ii) vendor’s Declaration of Forfeiture
Notice of Real Estate Contract

4. PROCESS FLOW #2
Determine
what liens
exist, when
they were
recorded or
filed
HOA CCRs recorded
Lien for HOA assessments exist as of the
recording date of the CC&Rs and are
superior to all later recorded liens and
judgments, IF….
HOA Assessments Delinquent
Delinquent HOA assessments are
superior lien to all Mortgages or DOTs
recorded AFTER the HOA assessments
are delinquent
Mortgage or Deed of Trust recorded
Mortgage & DOTs are junior to all prior
recorded liens including delinquent
HOA assessments
Every lender should request a statement
from the HOA showing the current, past
due and delinquent HOA assessments to
ensure the Mortgage or HOA is not
subordinate to those delinquent HOA
assessments which could result in the
elimination of the Mortgage or DOT if
the HOA forecloses on its lien.

5. PROCESS FLOW #3 – FIRST IN TIME
Determine
what liens
exist, when
they were
recorded or
filed
Mortgage or DOT recorded (usually to developer of HOA)
If the DOT or Mortgage is
recorded prior to the recording of
the CC&Rs, the DOT and Mortgage
always has priority over the HOA
assessments
HOA CC&Rs recorded
HOA assessments are subordinate
to the prior recorded Mortgage or
DOT
* If the Bank forecloses on its
mortgage or DOT eliminating the
HOA lien assessment on a unit,
the HOA can re-assess all units to
recover the delinquent amount as
a “common expense.”
Other Lien
Mortgage & DOTs recorded
subsequent to CC&Rs – see
Process Flow #1 and #2
For all other types of liens and
judgments recorded after the
CCR’s are recorded, the other
liens are subordinate to the prior
recorded HOA CC&Rs and prior
recorded Mortgage or DOT.

6. PROCESS FLOW #4 – TAXES AND ASSESSMENTS
Determine
what liens
exist, when
they were
recorded or
filed
HOA CCRs recorded
Lien for HOA
assessments exist as of
the recording date of the
CC&Rs and are superior
to all later recorded liens
and judgments, EXCEPT…
Real Estate Taxes, Property assessments
RCW 84.60.010 Real
estate taxes,
governmental
assessments and charges
on real property always
have super-priority lien
status, EXCEPT…
IRS liens
IRS tax liens ONLY have
priority AFTER Notice of
Federal Tax Lien has been
filed in the real property
records. The federal tax
lien arises and relates
back to the assessment
date. IRS 6323(a)

7. OTHER CONSIDERATIONS:
1. There is no 6 month lien priority if the HOA forecloses its lien non-judicially.
2. The 6 month super-priority lien for HOA assessments may be reduced to 3 months.
3. Special HOA assessments that are not delinquent at the time the Mortgage or DOT is recorded, do
not have priority over the Mortgage or DOT and are not included in the 6 month super-priority lien.
4. Statute of Limitations: HOA has three years to file a lawsuit to enforce its lien and or collect the debt
after the assessment becomes due or the lien (and personal liability of the debt) will be extinguished
by operation of law. RCW 64.34.364(8)
5. The HOA can pursue collection of the unpaid assessment against the prior owner once a judgment
has been obtained against the prior owner through the judicial foreclosure process.
6. If the unit is not owner occupied, the HOA may commence a foreclosure and seek appointment of a
receiver (not sooner than 90 days after the assessment was first delinquent) to take possession of and
rent out or charge the occupant rent for the unit. RCW 64.34.364(10)
7. After the HOA unit is sold at foreclosure, the unpaid assessment is deemed to be a “common expense”
of the HOA. The HOA can re-assess all the units (including the foreclosed unit) for the delinquent
unpaid assessment amount. RCW 64.34.364(11)
8. Redemption: Once an HOA forecloses on its lien, any lienholder who is “subsequent in priority” may
redeem within one year after the sale (buy the property) by reimbursing the HOA or person who
purchased the unit at the foreclosure for the bid amount plus other charges. RCW 6.23.010

8. Mortgagee can get the 6 month super-priority HOA lien reduced to
3 months if HOA fails to give Notice or gives Notice late:
If the Mortgagee fails to pay the delinquent assessments prior to the judicial foreclosure, the HOA foreclosure sale will
eliminate the Mortgage/DOT. The Mortgagee may then “redeem” within one year by paying the bid amount and other costs.
BAC Home Loans Servicing, LP vs. Fulbright, 180 Wn.2d 754, 328 P.3d 895 (2014)